author | Wu Blockchain Editorial Department
The criminal investigation of Binance by the U.S. Department of Justice ( the SEC and others are all civil investigations) has always been an unresolved "big thunder" in the industry, and it is also the biggest difficulty that Binance faces today. Now that the boots have finally landed, it is also a great benefit to the industry and avoids obstacles after the bull market starts. But more details remain to be seen, including specific penalties for CZ and whether there are more banning rules for Binance.
Original text of Bloomberg report on November 21, 2023
The U.S. Department of Justice is seeking more than $4 billion from Binance Holdings Ltd. as part of a proposed resolution to resolve a long-running investigation into the world’s largest cryptocurrency exchange.
Negotiations between the Justice Department and Binance include the possibility of its founder CZ facing criminal charges in the United States as part of an investigation to resolve alleged money laundering, bank fraud and sanctions violations, according to people familiar with the discussions.
CZ currently lives in the United Arab Emirates, which does not have an extradition treaty with the United States, but this does not prevent him from traveling to the United States voluntarily.
Binance did not respond to multiple email and phone requests for comment. The U.S. Justice Department declined to comment. An announcement could come as early as the end of this month, although the situation remains fluid, according to people familiar with the matter who asked not to be identified discussing confidential matters.
Matt Walsh, founding partner of Castle Island Ventures, said, “A settlement with the U.S. Department of Justice that includes regulatory provisions could be a compromise that protects investors while allowing Binance to move toward more institutionalization and compliance. the future direction of development.”
The exact timing and structure of the proposed settlement, as well as the specific charges, are unclear. However, Binance may be required to pay more than $4 billion, which would be one of the largest fines in a criminal cryptocurrency case.
The investigation was jointly led by the Criminal Justice Division’s Money Laundering and Asset Recovery Section, National Security Division and the U.S. Attorney’s Office in Seattle.
The agreement aims to strike a balance that allows Binance to continue operating rather than risking its collapse, which could negatively impact the market and cryptocurrency holders, according to three people familiar with the matter.
If Binance and the U.S. Department of Justice agree to a deferred prosecution agreement, the DOJ will file criminal charges against the company. But the U.S. prosecution will not proceed as long as the company meets stipulated conditions, including paying a substantial fine and agreeing to a statement of facts detailing its wrongdoing. A process will be established to monitor the company's compliance.
Regarding possible sanctions violations, the U.S. Department of Justice has been investigating whether Binance helped evade U.S. sanctions on Iran and Russia, according to a person familiar with the matter. Binance has also come under scrutiny for whether it allowed transactions that financed Hamas.
It is one of the largest investigations into a cryptocurrency company by the U.S. Department of Justice and follows the collapse of cryptocurrency exchange FTX and the conviction of its founderSBF earlier this month on fraud and conspiracy charges. sexual solution.
While U.S. Department of Justice officials have been pushing for widespread leadership changes at the company, it is unclear whether other Binance executives besides CZ will face charges in the case.
In June this year, the U.S. Securities and Exchange Commission also filed a lawsuit accusing Binance and CZ of improperly handling customer funds, misleading investors and regulators, and violating securities rules.
The lawsuit effectively puts Binance’s U.S. arm in trouble. Binance.US CEO Brian Schroeder left the company in September amid a round of layoffs at the crypto platform. The company has cut about one-third of its workforce, more than 100 positions. Trading volumes on Binance .US have dropped significantly after the exchange lost bank support and suspended U.S. dollar deposits.
The U.S. Commodity Futures Trading Commission accused Binance and CZ in March of regularly violating U.S. derivatives rules as the companies grew into the world's largest digital asset trading platform. The agency said at the time that Binance should have registered with the agency years ago and continued to violate CFTC rules.
Binance has disputed the lawsuits and said it has actively cooperated with regulators’ investigations and expressed disappointment in the enforcement actions. In a statement in March, CZ said the CFTC complaint “appears to contain an incomplete statement of facts” and that Binance disagreed with the way many of the issues were described. The company called the SEC filing an example of the agency using "crude enforcement and litigation tactics to regulate, rather than the thoughtful, nuanced approach needed to adapt to this dynamic and complex technology."
Full text of Reuters report in December 2022:
https://www.odaily.news/post/5183800
Citing four people familiar with the matter, Reuters reported that the U.S. Department of Justice’s protracted criminal investigation into Binance may still be unable to reach a conclusion due to differences among prosecutors. People familiar with the matter said the investigation began in 2018 and focused on whether Binance violated U.S. anti-money laundering laws and sanctions. At least six federal prosecutors are involved, and some believe enough evidence has been gathered to take aggressive action against Binance and bring criminal charges against individual executives, including founder CZ. Other prosecutors believe time is still needed to review more evidence.
The investigation involves prosecutors from three Justice Department offices: the Money Laundering and Asset Recovery Section (MLARS), the U.S. Attorney’s Office for the Western District of Washington in Seattle, and the National Cryptocurrency Enforcement Team. The Department of Justice requires that money laundering charges against financial institutions must be approved by the head of MLARS. Any action against Binance may also require signatures from the heads of two other offices as well as higher-level Justice Department officials, sources said.
Binance’s U.S. law firm, Gibson Dunn, has met several times with Justice Department officials in recent months, people familiar with the matter said. Binance’s defense included that a criminal prosecution would be a serious blow to the cryptocurrency market, which has been in a lengthy downturn. Discussions also included possible plea options.
Sources revealed that the investigation charges include unlicensed money transfers, conspiracy to launder money and violation of criminal sanctions. CZ and other senior executives have become targets of the investigation, but prosecutors have not yet made a final decision on charges. It’s possible that the Justice Department will prosecute Binance and its executives and negotiate a settlement, or it could settle the case without taking action.
